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Starbucks lauds one-on-one marketing potential of Mobile Order and Pay

Starbucks has boasted seeing six million transactions through Mobile Order and Pay every month and said that the digital initiative is giving it a “one-on-one marketing capability” it's yet to take full advantage of.

Mobile Order and Pay first launched in Portland over a year ago and lets customers order in advance from their phone and collect without waiting in line. It was made available across the US in September and earlier this week was also rolled out to UK customers.

Since then, over 21 per cent of total US transactions were made using the mobile apps and over one million American customers used the Mobile Order and Pay option over Christmas, with those customers then averaging approximately five mobile orders in the month.

Chief executive Kevin Johnson said it is beginning to take advantage of the “one-on-one marketing capability” of Mobile Order and Pay, allowing it to target customers with new food and beverage offerings.

“What we find is, once we encourage trial that starts to lead to repeatability,” he said.

The coffee-chain added that it was “just scratching the surface” of what it could achieve with this and has a “robust” roadmap planned for additional features, including integration of its loyalty programme – My Starbucks Rewards – and ability to favourite stores, as well as suggested and recommended selling.

This could prove a key driver of adoption and usage, given the chain has managed to increase the number of active My Starbucks Rewards members in the U.S. to 11.1 million, up 23 per cent over Q1 last year.

China

Starbucks is now turning its digital investment to China, its second largest market, where it's planning a full roll out of Mobile Order and Pay.

It’s seen success from other digitally-led initiatives, including the introduction of social gifting to the market through e-commerce giant Alibaba last year, to what Johnson described as “a stunning customer response”. It means that through Alibaba’s Tmall, customers in China can give digital Starbucks gifts, including My Starbucks Rewards memberships, individual beverages and preloaded Starbucks digital gift cards.

As a result of turbulence in the economy, sales in the region rose only five percent, down from eight percent last year. However, “China is here to stay” according to Johnson and it will continue with plans to increase its number of stores from 2,000 to more than 10,000 by 2019.

Gloablly, the coffee-chain draw $5.37bn in sales for the first quarter of 2016, up 12 per cent from the same period last year.

Jennifer Faull

The Drum senior reporter Jen Faull provides news and insight on the latest developments in retail and FMCG.

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